Morning Notes – 4/1/2022

• And while I am the first to caution about gleaning too much from the last day of a calendar quarter or month, the S&P 500 failed on a reconnect with the 5-day EMA, closing slightly below it and triggering a formal sell signal on the Navigator Algorithm.
• Let’s see how it goes this morning, but the fat, squatty, 45-degree angle overnight profile would suggest that traders won’t easily conquer 4550 or so if we travel north.
• Volatility-wise, we are still looking at a small range today of plus or minus 28 points from the open. Support is at 4525, then 4500, with resistance at 4550 and 4600.
• The 5-day EMA is inside the range and remains at a critical resistance level. It is about 4545 before the Open. But put it on your charts, as the EMA is dynamic, and we cannot quote an exact level. It changes with the price action.
• I hope you noticed that the expected ranges I quote for the day and week hold up exceptionally well. But yesterday, they competed with my other prediction.
• Some 60/40 funds were rebalanced in the last hour, causing a significant drop in equities and a big bond jump. Rebalancing explains the two red stock market candles on the final two days of March. We expected as much.
• But that also leaves Spike Rules in play this morning.
• Depending on the context, I mark the range in quartiles from green to red and initiate long trades in the first and short trades in the top quartile.
• While the expected range today would see the market closing above 4500. The next downside target would be the 21-EMA at 4460.
• President Biden decided to release half of our strategic oil reserves at 1 million barrels per day through May.
• Of course, he is trying to bring down prices at the pump as the only thing lower than his poll numbers is the shale deposits he adamantly opposes.
• The release, like so many things he does, is unwise. We are not in any kind of genuine emergency, other than Congressional midterms coming up where the Dems appear to be on course to being wiped out – absent more cheating.
• You will recall that President Trump filled the reserves to overflowing when the price of oil fell below zero in May 2020. It does not get much better than that.
• I will have a lot more to say about our global position in the monthly letter.
• Here is a teaser, were you ever on a losing team growing up? When I realize that 146 countries have signed on to the Belt and Road Initiative with China, I feel like I am on the losing team.
• From the pure number of Countries lining up with China, it is starting to get lonely as the U.S., Canada, and a few countries left in Europe. Here is a good link with some in-depth discussions. With Russia now on board with China, you will see a new monetary system, and we will not be part of it.
• April historically is the best month in the stock market. So let’s get to it and try to have some fun in this otherwise glum environment.
• I just posted all subscriber charts.

A.F Thornton

P.S. Have you read about China’s Belt and Road Initiative? Am I out on a limb here, or is China’s global influence and reach getting scary. How do you feel about Chinese missiles in Cuba or South America? Email me and tell me what you think.